What does Trump mean for tech M&A?

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After Donald Trump’s unexpected presidential victory earlier this month, the tech community has been trying to assess how the new administration will impact them.

There are concerns that there will be fewer H-1B visas for engineers, making it harder to hire the world’s best talent. People also interpret Trump’s stance on the Apple-FBI controversy as an indication that he will be in favor of more government surveillance. And he’s talked about reducing jobs overseas, which could make some U.S. tech businesses have higher costs and ultimately be less competitive.

Yet while he opposes the AT&T-Time Warner deal, possibly because of his angst toward CNN, some leaders in Silicon Valley remain hopeful that he will be like his Republican predecessors and advocate for less regulation. This could prevent many business roadblocks and it could also be good for M&A, one of the key outcomes where venture capitalists can make strong returns.

If he does in fact reduce taxes for businesses, “that potentially frees up a lot more capital to be investing in acquisitions,” said Stephanie Palmeri, partner at SoftTech VC.

Dramatically lower taxes, such as Trump’s proposed 15% rate, could cause some companies to shift money to the U.S.

“The repatriation of capital, if that comes from overseas, that should accelerate M&A as well,” said Hemant Taneja, managing director at General Catalyst.

But it’s hard to say what Trump will actually do, because he’s consistently inconsistent when it comes to discussing policy. His unpredictability could cause market swings, which could lead to more acquisitions, but at lower price tags.

“As staff and policies continue to take shape, we could see more volatility which will impact both IPO and M&A markets,” said Todson Page, U.S. technology deals leader at PwC. “IPO hopefuls could turn to M&A as their exit route of choice.”

This would be a disappointment for companies who were hoping to grow their value as a public company. Selling can be a safer bet, but it eliminates the upside potential.

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Page also predicts that fewer H-1B visas could bring about more acqui-hires, in order to obtain the best engineers. But these are small acquisitions that generally provide very little return for their investors.

They could potentially make it harder for industry leaders like Alphabet to make large strategic purchases. “Potential headwinds include issues relating to increased regulatory review on deals,” said Page.

Policy changes that result in a sudden rise in interest rates could make it more costly for corporations and private equity firms to finance deals, he pointed out. Some of the largest transactions require a lot of debt.

But for now, it’s “business as usual,” says Jamie Leigh, co-chair of Cooley’s M&A Group, referencing what has been a very active past few months for tech acquisitions. She says that a competitive landscape has resulted in “more movement in our space than most market participants can tally.‎”

In particular, Leigh is bullish about analytics and cybersecurity. Page also expects more security M&A and is forecasting more activity in the “Internet of Things” and artificial intelligence categories.

Said Page, there’s still a “need for growth, whether it be from consolidation, expansion or disruptive technology.”